Clearing Up The Confusion

[R. A. Hettinga]

<http://www.wired.com/news/print/0,1294,63050,00.html>

Wired News


Clearing Up The Confusion 
By Paul Boutin?

Story location: http://www.wired.com/news/culture/0,1284,63050,00.html

02:00 AM Apr. 15, 2004 PT

Science-fiction author Neal Stephenson's latest 800-page dispatch, The
Confusion, arrived in stores this week. But Stephenson fans hoping for
another brain-wracking, cryptographic puzzle to solve will find a surprise
instead: A central scene in the book provides a long, detailed description
of the mechanics of 17th-century bills of exchange. Pivotal themes in the
book involve the emergence of a cashless market at Lyon, France, and Sir
Isaac Newton's 30-year stint at England's national mint.

 The Confusion, which consists of two 400-page novels interleaved
(literally "con-fused") with one another, is the second of three volumes in
The Baroque Cycle, a nearly 3,000-page opus that fictionalizes the exploits
of Newton and the Royal Society of scientists to which he belonged.


 In an interview with Wired News, Stephenson, who rose to fame on
cyberpunk-themed novels including Snow Crash and Cryptonomicon, said his
interest in money and markets dates back to 1994, a time when crypto
hackers and Citicorp/Citibank CEO Walter Wriston were equally likely to
expound on the concept of money as an information technology.

 Wired News: Why the shift from cryptography to money and markets?

 Neal Stephenson: Cyberpunk has been over for a long time. Some would say
it was already over by the early '90s. It's over because it became part of
the main current of science fiction. One way of thinking about cyberpunk is
that it was a process by which SF belatedly came alive to the importance of
information technology, and re-evaluated not only the future but also the
past in that light. Similar things have been going on more recently with
nanotechnology and biotech. Anyway, for the last 10 years or so, money and
markets have been inseparable in my mind from other themes that are of
great interest to contemporary SF writers.

 WN: What does this have to do with The Confusion?

 Stephenson: To fuse means to melt; "con-fuse" means a melting together.
When you say "I'm all mixed up" you're saying the same thing in simpler
words. At least as far back as Chaucer, "confused" was being used in its
current sense of being muddle-headed. The older, technical meaning of
melting things together has become obsolete, but alchemists of the 17th
century would have been comfortable with it.

 Confusion de Confusiones is the title of a book written in 1688 by Joseph
de la Vega about the Amsterdam stock market. It takes the form of a very
long letter written by a Spanish Jew living in Amsterdam to his country
cousins who are thinking about moving to the city. He describes the
amazingly diverse tactics and schemes used by investors playing the market
there. Even though there was only one stock being traded -- the Dutch East
India Company -- they had bulls, bears, panics, bubbles and most of the
other features of modern bourses. (There is a de la Vega family in The
Baroque Cycle, but they are not meant as historical depictions of Joseph
and his cousins. I just used the family name as a way of paying homage to
this author.)

 In The Baroque Cycle we have got confusion of a few different sorts: Not
only alchemists melting things together, but also pandemonium in the
markets, a re-coinage in England (which means gathering together and
melting all the old coins) and the confusion of a war between France and
her enemies.

 Prior to the time I'm writing about -- let's say, 1618 to 1650 -- England
and the Continent were in a Hobbesian state of war, chaotic and frozen at
the same time. Starting around the mid-1650s, things settled down and there
was a time of astonishing creativity and flux, which I attempted to capture
in the first volume of this series, Quicksilver. What I'm trying to depict
in The Confusion is its aftermath: a time when so much has changed, so
fast, that things are all unsettled and out of whack, and settling, in a
chaotic way, toward a new equilibrium.

 WN: In a central scene in The Confusion, the entrepreneurial heroine,
Eliza, conducts a lengthy parlor game among idle rich Frenchmen and women
of Versailles to explain how they can transfer silver safely across the
English Channel using a bill of exchange. Did you think your readers also
needed the concept explained in detail?

 Stephenson: This passage is admittedly an expository one, but it's meant
to work on a couple of levels. Partly there is a need to acquaint readers
of the book with the basic principles of a bill of exchange. But what's
much more alien to modern readers, I think, is the notion that the upper
crust of that society tried to avoid having anything to do with commerce.

 Bills of exchange weren't a new concept. They had been around for
centuries at the time the book takes place. They were the basis for the
medieval economy and the rise of the Italian banking houses. It is,
however, a new concept to the nobles to whom Eliza's explaining it, because
according to the code of behavior of the noble class, they're not allowed
to dirty their hands with commerce.

 Nowadays, we take it as a given that the most powerful people in any given
society will be the ones who have mastered the art of making and holding on
to money, but it was different back then. From our point of view, it seems
obvious that this was a crazy situation and such a system was bound to fall
apart. How it began to crumble is part of the story I'm telling here.

 WN: In the book, a huge financial crisis hits Western Europe in the early
1690s, driven by a lack of available coinage, as well as the entire French
government losing its credit rating. Did that really happen?

 Stephenson: It really happened. It would take a better economic historian
than I to explain why. At some level, trying to explain such events is a
little like trying to explain the weather. Very generally, it has to do
with the flow of metal around the world. That's important because money is
a sort of medium for the exchange of information. When the price of cloth
went up in Antwerp, it was because the system of international trade, in
some fashion that's too complex for us to understand, was transmitting
information about the supply/demand balance. Money makes that kind of
information flow better.

Nowadays money is electronic and there's plenty of it. Back then, money had
to be silver or gold. In those days silver came from the Spanish colonies
of Mexico and Peru, and gold came from the Portuguese colony of Brazil. It
was transported across the Atlantic to Europe, though English and other
privateers did their best to intercept it en route. Some of it circulated
in European markets, some was hoarded in the vaults of wealthy families and
institutions, and a lot of it flowed east toward India and China. China was
notoriously hungry for silver. It was a complicated flow pattern, with any
number of sources and sinks and eddies and feedback loops, and like any
other such system it was capable of chaotic behavior. If enough people
hoarded their metal, a money shortage would develop, which would make it
very difficult to conduct trade on any level beyond that of a village
market, and throttle the flow of information.

 The English coinage had been reformed a century and a half earlier, under
Elizabeth. Thomas Gresham is rightly or wrongly given credit for this. At
any rate, he got rich and endowed Gresham's College in London, which became
the clubhouse of the Royal Society. And after the Royal Society luminaries
had achieved a foothold in London, and helped rebuild the place after the
fire, many of them turned their attention to problems relating to money.
John Locke and Isaac Newton debated how much silver should be in a pound
sterling, and what the exchange rate ought to be between silver and gold.
The Bank of England was founded in 1694 at a time when the economy was
almost stopped because of a currency crisis, and a general re-coinage got
under way at around the same time.

 You asked about France's credit rating. This had its ups and downs, which
make for a pretty long and complicated story unto itself. I had to set at
least a few limits on how much detail I was going to include about such
things in this project, and so I've given a highly simplified, streamlined
account of it here. The real crash of the old Lyon system occurred some
years later, in the early 1700s. In The Baroque Cycle, I have depicted a
major crash during the 1690s. This is not far off the mark since the French
economy was profoundly screwed up during that period owing to war, famine,
hoarding and messed-up coinage. But as always if you want the full story,
you need to read some real history. The third volume of Fernand Braudel's
Civilization and Capitalism trilogy covers this pretty well.

 WN: In the novel, Isaac Newton agrees to join the mint in hopes of
recovering a legendary horde of special gold that had been scattered around
the globe. Is that true?

 Stephenson: This is altogether fictitious. No one knows why he decided to
work at the mint, but there is zero evidence that it had anything to do
with recovering some stolen gold.

 No one can really know what was going on in Newton's head. In trying to
get some understanding of why he was interested in alchemy, I've had to
rely on scholars who know more about it than I do, like Richard Westfall
and Piers Bursill-Hall. And if I state their views wrongly, I apologize in
advance. But the gist of it seems to be that Newton was trying to achieve
some specific goals with alchemy. Some of those goals might have been
religious, but many were clearly scientific. As a scientist, he knew that
he could only explain so much with the tools that he was using, and that to
advance beyond that point he was going to need a different toolbox. He
recognized that a lot of alchemy was nonsense, but he thought that by going
about it in a systematic and rational way he'd be able to solve some
scientific problems. He would have rejected the label of magician because
it might have had dark connotations to him.

 WN: Any parallels between the economic crises in The Confusion and today's
U.S. economy?

 Stephenson: That's not what I'm aiming for here. I'm not trying to say
that this epoch was interesting because it was somehow analogous to the way
things are today. I'm saying it was interesting in its own right. Part of
what makes it interesting is just how different it was from today's world.

 This might sound funny after all that I've said above, but I hope that
readers won't be conscious of any of the abstract themes that I've been
talking about here. This book is meant to work as a yarn. I hope that
readers will take it as such. If they also want to go think deep thoughts
about currency fluctuations during the 1690s, then there's plenty of that
in here for those who want to read it on that level. Everything I've talked
about above took place in a world full of pirate ships, sword fights,
seductive courtesans, picaroons and other staples of the bodice-ripping and
swashbuckling genres, which I have not been above putting into these books.

 Neal Stephenson will serve as toastmaster for the Nebula Awards in Seattle
this week, and will appear at the Los Angeles Times Festival of Books on
April 25.


-- 
-----------------
R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'